Guyana Goldfields earns US$2.3M in 1st quarter

The Canadian-owned Guyana Goldfields Inc has recorded net earnings to the tune of US$2.3 million for the first quarter of 2020, compared to a loss of the same value during the corresponding period in 2019, which was driven by higher margins from higher gold prices, partly offset by higher cost of sales per ounce due to the higher fixed cost absorption from lower mined volumes.
This was reflected in its financial results for the first quarter ending March 31, 2020 that were filed on Thursday in Canada.
However, while the company reports a higher net earnings, its gold output at the Aurora mine in Region Seven (Cuyuni-Mazaruni) in the first quarter of this year is 28,100 ounces – a reduction of some 23 per cent compared to the 36,600 ounces recorded in the first quarter of 2019.
The Guyana Goldfields, nevertheless, noted that from the 28,100 ounces produced, 24,200 ounces of gold were sold at a cash cost, before royalty, of US$1084 per ounce. Cost of sales was US$1376 per ounce and all-in sustaining costs (AISC) were US$1352 per ounce.
The mining rates during the first three months of 2020 averaged 21,200 tonnes per day (tpd), representing a 62 per cent decrease in mining rates compared to 56,000 tpd recorded in the first quarter of 2019.
“This decrease was due to mine sequencing, pit constraints imposed by smaller benches and the suspension of waste stripping at Rory’s Knoll pit in February to safely allow ore production from the bottom of the pit,” the mining company explained.
It went on to add that the 2020 first-quarter mill performance of 6300 tpd, which is lower than the 7200 registered the previous year, was as a consequence of the lower throughput from mainly hard rock ore being milled during those first three months.
Guyana Goldfields further reported cash and cash equivalents of US$15.5 million as at March 31, 2020. This is US$6.6 million lower than the US$22.1 million reported at December 31, 2019.
“We generated a lower amount of cash from operations than in the first quarter of 2019 as a result of lower gold sales, an increase in metals inventory due to delays in gold sales as a result of air travel cargo delays resulting from COVID-19-related travel restrictions and a concerted effort to reduce payables,” the company stated.
Back in March, the Canadian mining company has announced a temporary suspension of all underground development due to the coronavirus pandemic. However, taking into consideration the funding gap and the ongoing circumstances related to the global health crisis, it was further announced earlier this month that the next phase of mine development, both underground and open pit, would not proceed as originally planned. This will result in a period of care and maintenance at sites once Rory’s Knoll Phase Four is completed, and satellite ore and low-grade stockpiles are depleted in the second quarter of 2020.
However, the company said it expected to be able to keep the mill operational up to mid-June, with production estimated to total approximately 45,000-50,000 ounces in the first half of 2020.
“This is higher than our previously-estimated production for the first half of the year of 35,000 to 45,000 ounces. Thereafter, the mine will go into a period of care and maintenance for one to two quarters.
“Planning for the transition to care and maintenance is well advanced, and as such, we have already started the phased reduction in site activity. The site is expected to be in full care and maintenance by the end of the second quarter and a fulltime security presence will be maintained…, along with adequate crews to maintain the site, including environmental monitoring and compliance. Infrastructure such as camp, water supply, power supply, and other systems will remain in operation at a reduced level,” it stated.
Meanwhile, in response to the coronavirus pandemic, Guyana Goldfields said it instituted a number of safeguards in order to continue operating in a safe manner, including reducing the number of employees on site to accommodate single-room occupancy in the camp; social distancing practices; wearing of Personal Protective Equipment (PPE) where social distancing is not feasible and on flights; temperature checks at the check-in for flights to the site and voluntary time-off for employees with symptoms associated with the virus; and a reduced number of passengers on flights in and out of the site.
It was noted that open pit mining and plant operations continue largely unaffected at this time, utilising the additional safeguards put in place to maintain employee health and safety.
President and Chief Executive Officer (CEO) Allan Pangbourne thanked the employees for their hard work and dedication during this challenging time.
“The cooperation and diligence of employees in Guyana in adhering to the COVID-19 measures, have allowed us to continue operating as we prepare for the upcoming period of temporary care and maintenance … I thank the Guyanese Government for their support that allowed us to develop the Aurora Gold Mine and their continued cooperation that will lead to the first significant modern underground mine in Guyana. What we have been able to achieve at a remote site in Region Seven is commendable and the transition to underground mining will be a great opportunity for the Aurora mine and for Guyana,” Pangbourne added.
The Guyana Goldfields’ financial filing comes on the heels of the company entering into a Cdn$105 million deal with Canadian silver miner Silvercorp Metals Inc.
The two companies have entered into a definitive agreement that will see Silvercorp – with China-based silver mining operations – acquiring all of the issued and outstanding shares of Guyana Goldfields by way of a court-approved plan of arrangement under the Canada Business Corporations Act.